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Author Topic: Modern Chinese coin investments LIST #95 - Value vs snob investing, enjoyment  (Read 10271 times)
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badon
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« on: 2011 Oct 09, 07:49:22 am »



The article is broken up into separate posts - The coin investments list is at the end of the article

Another Pricepedia is out, and shaking up the market. My recent advice has been to stick with the reliable, rare and popular coins - the "snob" coins. This month's Pricepedia, and tamo42 below, both recommend a value investing strategy for underpriced coins. Indeed, in a strong market, there's no doubt that would be a reasonable course of action, because the most popular and rare coins might be overpriced. However, we're not in a strong market (yet!).

In a weak market, there are a lot of underpriced coins available, so it makes the buying decisions difficult, both for you as an investor, and for the person who eventually buys from you. That means that your underpriced investment is not getting any focused attention, and will get lost in the noise along with the other underpriced coins.

In a weak market, it's the dependable coins that are the most expensive, and thus the safest bet, especially if you end up needing to sell unexpectedly - you will be sure to get a good price from herds of buyers looking for the best coins, and who also have enough money that the ever-changing economic weather is unimportant. The cheaper coins may be difficult to get rid of for more than their gold or silver value, as tamo42 has noted for some nice 1987 pandas that sold from list #94.

On the other hand, the time to buy is when coins are cheap, which might favor the value coins over the snobs. But, it's still not that simple when comparing a "snob" investment strategy versus a value investing strategy. How do you choose which strategy is the right one? How about some basic facts to map out the territory first:

* "Snob" coins almost never seem underpriced, but they keep rising in value over the long term.
* "Snob" coins almost never drop in price, except over the short term, where they may just go flat for a while, instead of dropping.
* "Value" coins rise and fall, relatively, with the tides of the market. When everything is rising, they rise too. When everything is falling, they fall too.
* The risk for "value" coins is that they may fall more than the market, in general.
* The reward for "value" coins is that they may rise more than the market, in general.

So, taking a look at that map, you can see one key theme that affects both "snob" coins and "value" coins: Timing.

The snob coins are less affected by timing. A good time to buy for snob coins is whenever you can find them available for sale. A good time to sell them is never, because they will keep rising in value long after you have turned to dust. Those are the coins that wealthy people buy because their parents and grandparents bought them to ensure their descendants are wealthy. They earn the highest overall profits on the scale of decades, and require very little work to earn those investment profits.

Value coins are only a good buy while they're underpriced - after that, holding will only provide gains that are similar to the market as a whole. But, the gains possible when they make their move are much larger and quicker over the short term than anything else you can invest in. It's a lot of work though, you have to time it right, in both buying and selling, and of course, you have to sell coins that aren't underpriced anymore to credulous buyers that aren't as good at timing as you are.

That takes some skill, and the sure path to failure in value investing is greed. The most successful value investors I know of don't wait for the coin to rise to a fair valuation before they sell. They wait until it has risen to maybe half of where it will eventually end up, and then "leave some profits on the table" for their buyers. Their buyers are happy, and they're happy, so they get to do it all over again. Most of their buyers don't intend to sell, so they're content with healthy instant profits, and much smaller long term profits with the market rise.

In other words, the most successful value investor is actually a dealer! And not just any dealer, but a very smart, fair, and non-greedy dealer. The most popular dealers on Ebay are exactly those types of dealers. So, you actually have 2 different ways of doing your value investing: You can become a dealer yourself, or if you don't have the time and skill for that, you can buy from a dealer that caters to value buyers.

I'm particularly fond of snob investing. I'm far too lazy to become a dealer. But, at the same time, I recognize that there is a LOT of money to be made very quickly in value investing. So, when I want to do value investing, I buy from a value-dealer. I don't sell very many coins, so I earn a quick paper profit, and then ride the coin the rest of the way up the market.

I would make more money in the long run if I only did snob investing, but I actually LIKE coins and coin collecting, so after I've bought a key date coin, and there's nothing left for me to do as a snob investor with that series of coins, I might call up a value dealer and ask him if he has any bargains for my second and third favorite coins in the series. I make money, so there's no issue there, but I also get to enjoy the hobby of coin collecting practically for free. When I lose interest in the cheaper coins, I can sell them if I want to, and do it again.

So, which is better, snob investing, or value investing? There is no simple answer to that question. People of all incomes, high, low, and zero, can do all types, or combinations of types, with some creativity. Everyone is different, but one thing that most people have in common is that their skill and enthusiasm seems to depend on how much they like what they're doing. If you're ENJOYING your experience of investing in modern Chinese coins, you will probably become much better at it. In the end, the lower profits you might earn over the short or long term will be more than made-up-for with the additional skill you gain by broadening your horizons, and choosing some coins you WANT that don't necessarily fit your normal investing style.

My strategy is heavy on the snob investing, and light on the value investing. But, I still dabble in the value coins because I enjoy them, and they teach me things I didn't know before. Knowledge is power, and that is a bonus that only helps my main strategy of snob investing.


My choices


Focus your purchases on rarity together with popularity during this weak market. Sprinkle in some underpriced coins to ensure you don't miss out on big percentage gains in the cheaper coins.

* Coins in a 70 grade.
* Dragon and phoenix (marriage theme symbolism).
* Peacocks (marriage theme symbolism).
* Pandas, especially silver, the rarer the better.
* Lunars, starting with dragons, and expanding to the whole sets. 2012 year of the dragon will be lunar-mania.
* Normal sized expo pandas, especially gold accented silver ones, and silver Munich expo medals.
* 1979 year of the child, and possibly other child-themed coins like the 1989 children's fund panda .
* Other 1979 dated early coins and medals.
* Almost all medals are underpriced - buy the rarest, most popular ones first.
* 1990 goldfish medals.
* Gods medals (longevity, war & wealth, mazu, buddhas, etc)

Remember, there are several kinds of rarity, in order of importance:

* Mintage rarity
* Grade rarity
* Relative rarity within a series ("key" coins)
* Variety rarity/popularity (you have to have popularity too)
« Last Edit: 2011 Oct 09, 06:02:23 pm by badon » Logged

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« Reply #1 on: 2011 Oct 09, 07:49:44 am »

Two big changes to the list in this installment!

One, the Our Choices section is gone. Instead, badon and I will be putting our choices in our commentary for each list so they will always be up to date and attuned to the current market.

Two, the Fishball Panda Index has been added. Fishball is a panda collector from down under who has been tracking the prices of "poor man's" pandas recently. He's created several different indices tracking the low end of the market. I think this is a very important contribution, especially for new collectors who are leery of buying a $1000 silver panda. Over the past two months, it seems th 1/4 oz gold pandas have fared best. I'll be putting the information into a graphical form soon and comparing the indices against precious metals prices.

On to my choices for the current market climate. I'm seeing two trends develop rather rapidly.

One, many varieties are being passed over. In the current sold section, a 1995 1 oz silver panda small twig large date sold for $95. $95! That's a ridiculously low price for one of the rarer pandas. Yes, it's the middle variety of the three known 1995 varieties, but we're still talking about a rare coin with only a couple tens of thousands estimated to still exist.

Two, fractional 80s and 90s gold continue to be a fantastic deal. A 1987 gold proof set recently sold for 1.03 times its melt value (scroll down to the sold section to see). A graded set of proof coins for spot value? That's a buy!

Lastly, one comment on the deals that are listed here. Remember, I always post the best few deals available at any one time. I'll always list a $0.99 auction over a Buy-It-Now if there's a choice. So when you see a coin you might be interested in, go ahead and put a low bid in for it. During the current weakness in precious metals, you might just snag it!
« Last Edit: 2011 Oct 09, 08:32:09 am by tamo42 » Logged

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« Reply #2 on: 2011 Oct 09, 07:49:51 am »

Table of contents


Not everything is in the table of contents, but all the important stuff is here.

* Opera web browser
* Coins sold from the previous list
* Chinese coins are better
* Register, read replies, get NOTIFICATIONS, access drafts
* Recommended reading
* Problem sellers
* NCS conserved
* 70 grade coins
* Proof pandas
* BU pandas
* Platinum and palladium pandas
* Other pandas and expo coins
* Lunar coins
* Other investment grade coins
* Helpful searches
« Last Edit: 2011 Oct 09, 08:11:31 am by tamo42 » Logged

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« Reply #3 on: 2011 Oct 09, 07:50:08 am »

Opera web browser



I have found that the fastest web browser for loading these pages of coins is the Opera web browser. With other browsers, my fastest quad core computer slows down a lot on just one page. With Opera, I can load the whole thing up on my slowest computer, no problem. Get it now:

http://www.opera.com/browser/download/

There's also a handy "portable" version that does not require installation:

http://www.opera-usb.com/operausben.htm

Click on "Mainpage" to find versions in other languages besides English.
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« Reply #4 on: 2011 Oct 09, 07:50:29 am »

Coins sold from the Modern Chinese coin investments LIST #94 article

Coin Sold  Sale Price  Sale Type  Melt RatioAg oz priceAu oz price
1981 15 g silver lunar rooster NGC PF 69 UC$2244a148.71.71.36
1982 15 g silver lunar dog NGC PF 69 UC$3058a202.97.71.86
1983 1/2 oz gold panda PCGS MS 69$1245a1.5139.80.75
1986 1/10 oz gold panda NGC MS 69$244.5a1.497.810.14
1986 1/2 oz gold panda PCGS MS 69$885a1.0828.30.54
1986 15 g silver lunar tiger NGC PF 69 UC$711.22a47.122.70.43
1986 24 g silver Empress of China PCGS MS 69$92a3.812.940.05
1987 P 1/2 oz gold proof panda PCGS PR 69 DCAM$1499b1.8247.90.91
1987 P gold proof panda 5 coin set NGC PF 68-69 UC$3200a1.02102.1.95
1987 S 1/2 oz gold panda PCGS MS 69$936.67a1.1429.90.57
1989 1 oz silver panda PCGS MS 69$153.75a4.914.910.09
1990 1 oz silver dragon & phoenix NCS NGC PF 69 UC$688b22.022.00.41
1990 1 oz silver panda large date PCGS MS 69$161.49a5.165.160.09
1990 1 oz silver panda large date PCGS MS 69$151.25a4.834.830.09
1995 1 oz silver panda small twig large date PCGS MS 69$95.78a3.063.060.05
1996 1 oz silver proof unicorn NGC PF 69 UC$535a17.117.10.32
1997 1 oz silver ancient paintings peacock NCS NGC MS 69$305o9.759.750.18
1997 1 oz silver ancient paintings peacock NCS NGC MS 69$300o9.599.590.18
1997 1 oz silver unicorn NGC MS 69$149b4.764.760.09
1997 1/2 oz gold return of Macao NGC PF 69 UC$1552a1.8949.60.94
1997 1/2 oz silver colored proof panda NGC PF 69 UC$78.23a5.002.500.04
1997 1/20 oz gold panda small date PCGS MS 69$168.06a2.055.370.10
1998 1 oz silver colored proof panda NGC PF 69 UC$315.99a10.110.10.19
1998 2/3 oz silver scallop flower lunar tiger NGC PF 69 UC$800o38.325.50.48
1999 1 oz silver Beijing expo panda NGC PF 69 UC$256.88a8.218.210.15
2000 1 oz gold panda mirror PCGS MS 70$8500o5.18271.5.18
2000 1 oz silver panda frosted NGC MS 69$498.11a15.915.90.30
2001 D 1 oz silver panda NCS NGC MS 69$152.58a4.874.870.09
2001 D 1 oz silver panda NGC MS 69$172.5a5.515.510.10
2003 1 oz silver panda NGC MS 70$500o15.915.90.30
2004 1 oz silver Beijing expo panda NGC MS 69$232a7.417.410.14
2004 1 oz silver construction bank panda NGC MS 69$169.27a5.415.410.10
2006 1 oz silver Beijing expo panda NGC MS 69$304a9.729.720.18
2006 1 oz silver Beijing expo panda NGC MS 69$293.87a9.399.390.17
2009 1 oz silver 30th anniversary panda NGC MS 70$285b9.119.110.17
2010 1 oz gold panda NGC MS 70$2699a1.6486.31.64
2010 1 oz silver capital market panda NGC MS 69$159.04a5.085.080.09
Total 37 coins:$33791.19108020.6
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« Reply #5 on: 2011 Oct 09, 07:51:04 am »

Chinese coins are better





* Fidelity Overseas Fund (FOSFX)
* NASDAQ Average
* Brazilian Stock Index (BVSP)
* Crude Oil
* Gold
* Silver
* Chinese coins

This information comes from http://www.pandacollector.com/

The Fishball Panda Index

Created by Fishball at the Silver Stackers forum, the Fishball Panda Index (FPI) is to be an index of entry level Pandas (bullion) which is to be updated on a monthly basis using data from Peter Anthony's pricepedia.

MonthSilver FPIGold 1/20 oz FPIGold 1/10 oz FPIGold 1/4 oz FPI
Aug 20111000100010001000
Sep 20111019.221012.691027.901107.29
Oct 20111025.631122.241142.991183.32

Graphical version coming soon!
« Last Edit: 2011 Oct 09, 08:18:43 am by tamo42 » Logged

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« Reply #6 on: 2011 Oct 09, 07:51:18 am »

Sell your coins on LBC or CCF forums



The Chinese coin marketplace on LBC is a topic started by groovemachine for selling coins amongst LBC members. It's been around for a while now, and seems to be getting interesting, so I figured I would mention it here. Ebay is by far the best place to buy and sell coins, but sometimes it's interesting to see what's been posted over there.

There's also a similar place at the CCF
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« Reply #7 on: 2011 Oct 09, 07:51:24 am »

Register, read replies, get NOTIFICATIONS, access drafts



Always come back to check the replies on these articles. That's where most of the good stuff is! Register on the forums and click the "NOTIFY" button on this article to receive email notifications of new replies that may make some easy money for the first person to read it. Many of the best coins only last for a few minutes or seconds before somebody grabs them. If you get notified of replies, you'll be able to see anything new that I list right when I list it. You'll also stay informed of the hot topics, and see what other people are talking about buying.

Also, once you're registered on the forums, you can access the drafts forum where I post stuff I'm working on. Having access to my drafts lets you see the good stuff before anybody else - sometimes only minutes before, and sometimes more than a week before! You'll have valuable advanced information before the rest of the market gets it! Of course, you MUST click on the "NOTIFY" button for the drafts forum if you want to receive an instant notification that a draft has been posted.

Hint: Once you see the first draft, click the "NOTIFY" button for the draft. When my draft is almost ready for publishing, I break up the post into replies that follow the first post of the draft. You'll get a notification that a reply has been posted, and that will tell you the draft is almost done. A near-finished draft with the replies will contain more, better info than the first draft notification, so that's the good info you want to see.

Finally, you'll want to stay up-to-date on my postings, so click the "NOTIFY" button on my blog forum. You may want to take a look there from time to time, especially to read my older postings that are packed with valuable money-making information. If you're wondering if I'm worth listening to, you can see a list of my articles sorted by date. Check out the older ones to see my track record at predicting the markets. It's impressive, if I do say so myself. No one on the planet as a track record like mine. You can trust my predictions, they're always right!

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« Reply #8 on: 2011 Oct 09, 07:51:39 am »

NCS and NGC need to help buyers find conserved coins for long term investment



I've talked a lot about NCS conservation of silver coins, especially the ones with the highest grades that were graded in the past. Coins that were not conserved before grading could degrade over time as invisible residues corrode their surfaces. That could make your investments virtually worthless!

There are nuances to which coins are worrisome, and which aren't, so I've recommended coins that look good despite not knowing whether they've been conserved or not. For example, an old silver coin that still looks good after many years is probably OK, and a newer panda that came from modern PVC-free packaging is probably OK too. But, the only way to know for sure is to only buy coins that have been conserved before grading.

Sadly, NCS and NGC continue to refuse to indicate on the holders if a coin has been conserved, even if requested. I have begged them to let me buy coins that I know will not become hunks of scrap metal over time, and they won't listen to me - just one person - but they will listen to the market as a whole. That means you. Everyone needs to contact NCS and tell them you want to buy coins that you know have been conserved. Tell them that you want to buy coins that NGC marks as conserved on their holders. Here's the person to contact:

Craig Fiumara
Numismatic Conservation Services
Operations Manager
Phone 866-627-2646  Ext. 145
Fax 941-360-2559
CraigF@NCScoin.com

Once we persuade them that we want to know that our coins are safe, they will obey our demands and start marking the conserved coins. Only then can we be reasonably certain (but never 100%) that our investments will not become worthless over time.

 
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« Reply #9 on: 2011 Oct 09, 07:51:47 am »

NCS conserved certificates?



What if NCS started selling certificates that said that a coin had been conserved? Would you want one for each of your coins, so you could prove to a buyer that your coins are professionally conserved? It's been impossible so far to persuade NCS and NGC to start labeling conserved coins. But, they may be willing to produce certificates, especially if it earns them a little extra money.

Prices earned by sellers have been significantly better for the coins they advertise as NCS conserved. When buyers have a choice between 2 coins, one that's cheaper, but not NCS conserved, and one that's significantly more expensive, but has been NCS conserved, the buyers almost always choose the NCS coins first. Once those are gone, then the unconserved coins start selling again.

Many of the sellers are able to provide paperwork to show that a coin has been conserved, and the seller's reputation leads to buyers trusting sellers when they say the coins are conserved. But what about the buyer when it comes time to sell? It would be very helpful if they had a certificate from NCS that says for certain that a coin has been conserved. It would add value to the coins when they initially sell from a dealer, and it will also make it easier for the buyer to sell later too.

Further down in this article is Craig Fiumara's contact information at NCS. It would be helpful to make this possibility a reality if you told him you'd like to buy conservation certificates for your coins.
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